Being a Controller keeping you from seeing the kid’s baseball game?
Then, our network was created for you! We’re keeping our costs low so that you can keep more of the billable hourly rate. Which means you can work less hours and still be compensated at, or above, your current level. Basically, there’s only a few components to any hourly rate charged by an agency or firm.
Most firms set the consultant pay rate at market rate as if you are in a permanent role. For example, let’s say the market rate (salary) for a controller is $105,000. In a consulting role, where you’re paid by the hour, that equates to $52.50/hour (assuming you worked 2,000 hours and had 2 weeks of vacation)
Payroll expenses, benefits, and direct labor costs are usually around 20% of the consultant pay rate. Some firms are larger and have more costs, or offer better health benefits that could drive this up, but we’ll stick with 20% as an average. So that’s $10.50/hour in our example.
So, we’re now at $63/hour ($52.50 pay + $10.50 taxes/benefits), but the firm hasn’t added in their piece of the bill rate. This is where things can really vary. Large national firms, or even full service locals, will generally mark up the consultant pay rate over 100%. We’ll just use 100% for easy math. This puts the bill rate at $105/hour, which means the firms cut is $42/hour ($105 bill rate – $63 labor cost).
Why do firms need to make $42/hour, you may ask? Well, large firms have tremendous overhead that must be absorbed. Full service local firms have a bench of experts such as transaction advisory, or NetSuite integration, that aren’t 100% billable so they must cover these services with the hourly rate. When you need a team of NetSuite experts, believe us, this is worth the cost.
Our network doesn’t require $42/hour for a few reasons. We don’t operate with a bench (full time employees), we don’t have a hierarchy that drives overhead, and we’re focused on keeping costs to a minimum. What do we do with the $42/hour? We sit down with the consultant and talk. We show them what we need to keep the network going, what value we think will compel companies to use the network, and the consultant keeps the rest. And to get back to the ball game…”the rest” is usually more than enough to buy a lot of time off for sitting in the bleachers. 😊